Initial Deposit Dispute
Page 2 of 2
Flamingo - I am ready to take all the steps required to get my initial deposit back. Yes it is a small builder and a new one, a very bad experience for a first home owner like me !!
the legal steps will cost you more money than 50% of your deposit.
i'd take as much as you can get out of them, and then complain to wherever you can complain for free.
i'd take as much as you can get out of them, and then complain to wherever you can complain for free.
I was also thinking of the same plan initially , but taking 50% deposit back would then weaken my case as they might say I have agreed to the 50% refund by accepting the amount. Complain for free can be done in ? Consumer affairs Victoria is the only place I know of . Is there anything else ?
there would be no case, the purpose of complaint would be to put it on their record and create problems for them, rather than try and recoup the rest of money
You need to be fair to the builder and the builder has to be fair to you.
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
You need to be fair to the builder and the builder has to be fair to you.
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well.
You need to be fair to the builder and the builder has to be fair to you.
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well.
Didn’t you have 2 week window to sign building contract and lock in the price? But you did not.
The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it.
You need to be fair to the builder and the builder has to be fair to you.
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well.
Didn’t you have 2 week window to sign building contract and lock in the price? But you did not.
The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it.
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder !
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ![/quote]
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder !
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?[/quote]
When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden.
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder !
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?[/quote]
Pre-approval is just a letter with lots of conditions, one of the conditions is to provide a fixed price building contract. And also most of people are borrowing at their maximum LVR and loan amount against their security/property, if there is an unexpected increase like this, it means that the customer cannot meet their loan conditions and lost their initial deposit. What you are saying is an ideal position, customers have the ability to borrow more and have plenty equity in their property to borrow against. But this does not apply to everyone. I agree that the base price should be locked after initial deposit is paid. Builders can advise customer how long does the period of fixed price last for. If they increase their price right after customer’s deposit, this is not a ethical practice.
You need to be fair to the builder and the builder has to be fair to you.
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you.
It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr
If you get the offer of 50% refund you should consider it.
The amount in dispute is not worth your time, I am sure your time is valuable.
Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT
Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K.
It just seems vindictive and its no good for your health.
Take whatever refund you can and cut your loses.
Builder is not your enemy, your enemy is increasing costs of building
I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well.
Didn’t you have 2 week window to sign building contract and lock in the price? But you did not.
The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it.
Future of building won’t be fixed price contract, this is not up to builders but big banks, they require fixed price building contract for this type of loan, if they don’t change the policy, I think building industry will have a cold season, lol.
You've only paid $2k. And they're offering you half of that back. This seems like a lot of jumping up and down over $1000.
You've only paid $2k. And they're offering you half of that back. This seems like a lot of jumping up and down over $1000.
$1000 is not a small amount for me sorry ..
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder !
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?
When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden.[/quote]
So just to clarify, you just paid the builder $2K on a verbal agreement without signing any documents or without getting any receipts form them stating what is for and what is included ?
Do you know if your builder is following HIA or MBA guidelines ?
When we signed for our initial deposit we signed a lot of documents including the quote, inclusions, shopping list etc and also there was a disclaimer that the quote is valid for only 14days and needs to be signed to hold the pricing. We did this online and they emailed back with signed documents. Did you sign anything ?
I think the builder offering you half your deposit back is reasonable. The builder is entitled to recover any costs they have spent to date on your build out of the deposit.
Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money.
Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on.
Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money.
Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on.
How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder !
For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ?
Also when you paid the deposit what terms and conditions did you sign ?
When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden.
So just to clarify, you just paid the builder $2K on a verbal agreement without signing any documents or without getting any receipts form them stating what is for and what is included ?
Do you know if your builder is following HIA or MBA guidelines ?
When we signed for our initial deposit we signed a lot of documents including the quote, inclusions, shopping list etc and also there was a disclaimer that the quote is valid for only 14days and needs to be signed to hold the pricing. We did this online and they emailed back with signed documents. Did you sign anything ?[/quote]
Can you guide me as what documents did you sign and check before transferring the initial deposit ? Something I will keep in mind for the next time I engage with a builder.
I think the builder offering you half your deposit back is reasonable. The builder is entitled to recover any costs they have spent to date on your build out of the deposit.
Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money.
Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on.
Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money.
Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on.
Building journey can be very emotional at times. From what i have learnt so far nothing goes according to plan. Better take the $1000 and negotiate the discounts in build package.
If the builders don't increase their prices, some will go bankrupt before build completion and which case everybody looses bigly!.
Hi Guys,
Need some advice about a scenario I am facing.
I had paid a builder initial deposit (says non refundable) of 2000$ based on there initial quote and inclusions list we discussed verbally.
They then gave me an HIA contract with the same contract price as discussed and even a draft drawing.
However within 2 weeks before I could sign and send the HIA contract they came back saying that they would not be able to build at the same price and are now asking for 15000$ extra for the same inclusions.
This new contract price is above my budget and hence I have asked for my deposit back as it was paid on a verbal agreement of initial contract price.
The builder is not willing to give me a full refund. What can I do in this situation ? No contract is signed yet.
Need some advice about a scenario I am facing.
I had paid a builder initial deposit (says non refundable) of 2000$ based on there initial quote and inclusions list we discussed verbally.
They then gave me an HIA contract with the same contract price as discussed and even a draft drawing.
However within 2 weeks before I could sign and send the HIA contract they came back saying that they would not be able to build at the same price and are now asking for 15000$ extra for the same inclusions.
This new contract price is above my budget and hence I have asked for my deposit back as it was paid on a verbal agreement of initial contract price.
The builder is not willing to give me a full refund. What can I do in this situation ? No contract is signed yet.
Hi sparshrohatgi
It is possible that the Builder is breaching or repudiating the original agreement. If there is no Contract because the Owner did not “accept” the HIA contract, then it seems logical you would be entitled to recover your deposit. A deposit is not payment for works performed but rather as intended, a deposit. Much will depend on the facts of your case.
You might speak with the Office of Fair Trading for advice. You might escalate this to the NCAT if the Builder is not willing to refund the payment. It will likely cost more than $2k to get legal representation so you might spend the time to study the Contract and get assistance from Fair Trading and the Tribunal.
Cheers,
John
Related
12/09/2023
4
yes it does, you've just not understood it. theres a difference.
1/05/2023
1
In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance